Mergers and acquisitions (M&A) are often seen as high-stakes corporate maneuvers. Yet, despite the promise of financial growth and market expansion, a staggering 50–90% of these deals fail to deliver the expected value. The question is: why?
Surprisingly, it is not flawed strategy or bad financial modeling that derails most M&As. Instead, the primary culprit is the human factor—mismanaging people and clashing organizational cultures. Research shows that cultural and people-related challenges account for nearly two-thirds of failed deals. In other words, the success or failure of an acquisition is far less about spreadsheets and far more about people.
When employee integration goes wrong, the value of the entire deal is at risk. Consider retention: while companies typically retain around 88% of new hires after one year, that figure drops sharply to just 66% for employees from an acquired company. This means acquired employees leave almost three times faster, and for every departure, there are likely others disengaged, mentally checked out, or actively job hunting.
The difference comes down to mindset. New hires choose to join an organization, while acquired employees are thrust into change without choice. This creates anxiety, uncertainty, and resistance—conditions that a standard onboarding process simply cannot address.
Successful M&A onboarding begins before day one. Leaders must prepare by:
Ignoring cultural alignment can be disastrous, as seen in the failed Daimler-Chrysler merger, which collapsed under irreconcilable cultural differences.
Once the deal closes, the focus shifts to communication, culture, and human-centered support. In the absence of information, employees assume the worst, making clear, empathetic, and transparent communication essential. Leaders must also create two-way dialogue, building trust and guiding employees through uncertainty.
One powerful approach is longboarding—extending onboarding beyond the first week into a structured 100-day process. By establishing regular touchpoints, companies provide ongoing support as employees adjust. Adding personal touches—such as assigning buddies or fostering social connections—helps individuals feel valued as people, not just as positions on an org chart.
When AdsVerve acquired the smaller firm LiquidBox, they took a deliberate, people-first approach. Instead of rushing, they designed a two-month transition for the 23 employees, ensuring transparent communication at every step. The outcome was extraordinary: 100% employee retention after one year—a rare achievement in M&A.
The ultimate goal of M&A onboarding is not simply to merge systems—it is to unite people. Success comes when leaders help employees believe in a shared future that is brighter together. The real question for any executive is not just about financial upside, but:
How do we make our people truly believe in the future we are building?